I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

Now It's LA Trying To Kill Off Uber, Lyft And Sidecar

Another round in the ongoing battle between the rent seeking incumbents and the disruptive upstarts. The various new transport arranging companies like Uber, Lyft and Sidecar with their smartphone apps are finding that yet another city, this time LA, is pursuing them on behalf othe taxi and limo companies whose business they are so disrupting.

Disruption may be the name of the game for tech startups, but it also guarantees there will be pushback from the disrupted. Three companies that aim to change the way we think about taxis were reminded of that fact on Monday when Los Angeles became their newest battleground.

The city’s department of transportation sent cease-and-desist letters (embedded below) to Uber, Lyft and Sidecar, warning company officials and their drivers that operating an automobile-for-hire without a permit will not be tolerated.

I’ve been claiming for some time now that one of the reasons for slow growth in the economy is precisely that we have too much regulation. Regulation which prevents the upstarts from dethroning the incumbents: and it needs to be recalled that it is entry into the market that is responsible for almost all job growth and technological advance. This isn’t a complaint about the past couple of years either: it’s one about the past few decades.

Much the same point is being made here starting with the example of the way that the auto dealers are trying to prevent Tesla selling direct. And there was that fascinating paper a couple of days back that claimed that such regulation had reduced economic growth by so much that the US is today only one third as rich as it should and or could have been. They had in mind exactly and precisely this sort of regulation: where the incumbents twist it to prevent new entrants into the market.

We really do need to get rid of much of this regulation that so reduces economic growth. If no other reason than we’ll never actually solve the unemployment problem unless we do. The reason being that we need a certain level of economic growth just to keep up with the number of people being made unemployed by productivity advances. If GDP doesn’t grow faster than labour productivity then we’re inevitably going to have rising unemployment.

But I will admit that much the most surprising thing to me about this story was that LA City actually tries to regulate cabs and limos itself. The reason being this map:

The larger outline on the right in LA County. Which, as everyone who has ever been there will know is almost entirely urban to one degree or another. And the red part of LA County is LA City. Which, as you can see, is not contiguous, contains enclaves which are not part of the City and only just, by some inspired line drawing, avoids having exclaves itself.

That’s just not a reasonable or sensible goegraphic area to be trying to regulate transport options. It’s absurd that a ride or limo from Torance to Anaheim, which crosses LA City, is not subject to the City’s regulation while one with an end point in the City would be. It’s, as I say, with this sort of fractured geography simply the wrong size of jurisdiction to be regulating that transport option.

Everyone did think that it was the State doing the regulating of Uber, Lyft and Sidecar but now the City is trying to assert itself. Something ridiculous on those geographic grounds as well as being highly undesirable on those rent seeking grounds. That the incumbents are simply trying to make sure they don’t face technologically based competition.

My solution would be, as it always is, to dismantle the regulation. But at the very least, if regulation there is going to be, it needs to be based upon an entire urban area (say, LA County) rather than that absurd geographical entity that is LA City.

Think of it this way: there are 88 incorporated cities in LA County. In theory these smartphone apps (which are little more than electronic methods of hailing a ride) will need to negotiate with the taxi and limo commissions of each and every one of those 88 cities. And the County for the unincorporated areas. Yes, you probably do think as I do, that this is going to limit economic growth.

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